5. From the following details you are required to make an assessment of the average amount of working capital requirement of Hindustan Ltd.
Particulars Average period of credit Estimate for the 1st year (Rs.)
Purchase of material 6 weeks 26,00,000
Wages 1½ weeks 19,50,000
Overheads :
Rent, rates, etc. 6 months 1,00,000
Salaries 1 month 8,00,000
Other overheads 2 months 7,50,000
Sales cash 2,00,000
Credit sales 2 months 60,00,000
Average amount of stock and work-in-progress 4,00,000
Average amount of undrawn profit 3,00,000
It is to be assumed that all expenses and income were made at even rate for the year.